It's not called that, of course - we should refer to it instead as Sony's "next-generation computer entertainment systems featuring the 'Cell' processor".

Financial terms for the "broad, multi-year, royalty-bearing agreement" signed by Nvidia and Sony were not made public, but given the way each new generation of PlayStation has significantly outsold the previous one, PS3 should be a nice little money spinner for the graphics chip maker, and one that potentially will do more for its bottom line than the Xbox 2/Next contract would have.

Unlike the original deal with Microsoft, Nvidia's partnership with Sony extends only as far as the graphics chip, not to system logic too. Nvidia will design for Sony a "custom... next-generation GeForce" chip for 3D graphics and image processing.

"Our collaboration includes not only the chip development but also a variety of graphics development tools and middleware, essential for efficient content creation," said Sony bigwig Ken Kutaragi in a statement.

Apparently, Nvidia has been working on the chip for the last two years, according to company CEO Jen-Hsun Huang. That would put the start of company's involvement in PS3 development at least eight months before ATI confirmed its Xbox 2 design win. Then, it was suggested that Nvidia and Microsoft had fallen out over how much the latter owed the former for its graphics technology, and that led to the decision to adopt ATI chippery.

That may still be the case, but Nvidia's relationship with Sony certainly casts a new light on the affair. Would MS have had an issue with its erstwhile partner supplying such a key component to its console rival? Possibly, though it doesn't seem to be too bothered that IBM is supplying CPU technology to both Xbox 2 and PS3 - and quite possibly Nintendo's upcoming 'Revolution' console, too.

Nvidia's custom GeForce chip will be fabbed not through its usual foundry partners, TSMC and IBM, but by Sony itself, using the Group's Nagasaki fab and the OTSS plant it runs in conjunction with Cell manufacturing partner Toshiba.

Sony's roadmap calls for its next-generation console to be formally unveiled during Q1 2005, though the machine itself is not expected to ship until 2006. ®